Introduction
1. Natural gas and liquefied petroleum gas (LPG) are important sources of energy for New Zealand consumers. The majority of gas consumed is reticulated supply in the North Island i.e. it is delivered through piped supply networks. LPG is also supplied to consumers in bottled or canister forms, with sizes varying from a few hundred grams to many kilograms. There are also small reticulation networks based around large volume gas cylinder supplies.
2. Although not as prevalent an energy source compared to petrol, diesel and electricity, gas is seen as an essential energy source for many facets of New Zealand's economy and aspects of every day life.
3. The primary consumer of reticulated natural gas is the electricity generation sector. Gas provides approximately a quarter of New Zealand's electricity generation capacity. In the 2006 calendar year electricity generation consumed approximately 56 percent of New Zealand's total gas production. The remaining 44 percent of natural gas production is consumed in the industrial, petrochemical, residential and commercial sectors (the percentages by sector are 20%, 15%, 5% and 4% respectively). Gas is an important energy source for producing hot water and steam, central heating and heating in general and for cooking.
4. Providing secure and affordable supplies and ensuring that gas is supplied and able to be used in a safe manner is seen as crucial to its ongoing viability as an energy source.
5. In 2006, major changes were made to the safety provisions of the Gas Act 1992. Of particular note were:
- The inclusion of two safety related purpose statements in the Act in relation to the supply and use of gas in New Zealand:
- to protect the health and safety of members of the public in connection with the supply and use of gas; and
- to promote the prevention of damage to property in connection with the supply and use of gas.
- New requirements for safety management systems to be in place for gas distribution networks;
- New offence provisions and penalties.
6. The amendments to the Gas Act mean that consequential changes to the Gas Regulations are required.
7. This discussion paper proposes that the Gas Regulations 1993 be replaced with new gas safety regulations which take into account the new safety requirements in the Gas Act and are more user-friendly.
8. Wording and definitions used in this discussion paper are intended to indicate the proposed effect of the new regulations, and do not indicate that any particular form of words will or will not be used in the regulations.
9. It is intended that the new gas safety regulations 2008 will incorporate, where they have not otherwise been amended or deleted, the regulatory requirements from the Gas Regulations 1993.
10. The overarching objective of the regulations is to provide for the protection of the health and safety of members of the public in connection with the supply and use of gas and the prevention of damage to property in connection with the supply and use of gas.
11. The following specific objectives of the regulations have been identified –
- To define the rules for the quality and safe supply of gas.
- To define the requirements for safety management systems.
- To define the safety requirements for gas installations, gas appliances and fittings.
- To provide clarity regarding safety requirements for those undertaking work on gas distribution systems and carrying out gasfitting work.
- To define requirements for certification of gasfitting.
- To define requirements for notification and inspection of accidents.
- To enable the Secretary to obtain information and/or documentation to assist with investigations.
- To specify offences for which infringement notices and penalties can be issued.
Principles Underlying the Regulations
12. In developing the proposed regulations, we have been guided by the following principles. These are important to ensure the regulations are consistent with and adhere to core public safety imperatives without introducing extra requirements. The emphasis is on public safety and avoidance of property damage.
The principles of public safety around gas
- Ensure that consumers have access to safe gas supply and appliances that comply with consumers and up-to-date quality, safety and environmental standards.
- Ensure that gas workers, gas regulatory bodies and consumers are clear about their obligations and accountabilities.
- Provide regulations on gas safety standards that are clear, easy to understand, apply and administer.
- Ensure that gas workers and homeowners can deliver safe outcomes when undertaking gas work.
- Provide a transparent and informed decision-making process where decision-makers and those affected by those decisions are informed of the process.
- Ensure the gas safety regime is compatible with the electrical safety regime as appropriate.
- Provide for regulation when there is benefit to the consumer, the environment or public health and safety.
- Take a conservative approach if a significant amount of uncertainty exists.
- Ensure the regulatory regime must be credible with consumers, industry and international partners.
- Minimise compliance costs where possible and ensure the cost to administer the regulatory regime is reasonable.
- Ensure regulation does not impede innovation and technological updating.
- Ensure regulation is consistent with New Zealand's international commitments and obligations such as those related to trade.
- Ensure regulation is consistent with international best practice.
Gas Supply and Regulatory Setting
13. The supply of natural gas to consumers involves some major infrastructure for extraction, processing, transmission and distribution. Before entering the transmission networks, gas is sourced from wells and processed to ensure that the gas meets the required quality specifications. The gas is then compressed and fed into the transmission system.
14. Transmission involves moving gas through high pressure pipelines (above 2,000 kpa) to gas distribution networks and to high volume consumers, such as electricity generators. High volume consumers have infrastructure and systems to manage the gas pressures involved and to utilise gas in a safe manner. The high pressure pipelines used for the transmission of gas are regulated under the Health and Safety in Employment Act 1992, the Resource Management Act 1991 (RMA) and the Petroleum Act 1937 (through the transitional provisions of the Crown Minerals Act 1991). These are not covered by the proposed gas safety regulations.
15. Before gas enters distribution networks its pressure is reduced. The gas can then be supplied to consumers after passing through a regulator station where the pressure is further reduced to levels suitable for use. Larger volume consumers, such as industry and hospitals, may have their own substation type arrangements. It is estimated that there are approximately 11,500 kilometres of pipeline in various gas distribution networks throughout the North Island of New Zealand.
16. The Gas Act applies to gas from the point it enters the gas distribution system. In terms of safety, the Gas Act is supported by the Health and Safety in Employment Act and downstream of the distribution system by the Plumbers, Gasfitters and Drainlayers Act 2006. Changes to the safety provisions of the Gas Act in 2006 were complemented by revision of the Plumbers, Gasfitters and Drainlayers Act.
Proposed Gas Safety Regulations Framework
General Safety Requirements
17. The Gas Regulations set out requirements for separate aspects of gas safety. To make the regulations consistent with the new gas safety purpose statements in the Gas Act 2006, the proposal is to add a new section into the regulations setting out the "General Safety Requirements". These general safety requirements will underpin the remainder of the regulations.
Gas supply specifications
18. The specification or quality of gas is an important aspect in managing the overall safety of gas in New Zealand. Pressure, quality and detectability, while treated separately, are intrinsically linked in terms of gas safety.
Pressure
19. Maintaining adequate pressure within the gas supply system is important as low pressure may affect the operation of gas appliances and equipment and can result in adverse events, such as flame failure that allow for gas accumulation.
Quality/specification
20. The primary focus of gas specifications is to ensure that the gas being supplied to consumers is suitable for use in appliances and does not cause damage within the distribution system.
21. The composition of gas is important because contaminants can have adverse effects on infrastructure, appliances and equipment. For example, certain contaminants can cause corrosion in pipework, block or clog equipment and/or adversely affect its combustion in appliances. Improper combustion may result in carbon monoxide (CO) being produced and/or its accumulation.
Gas Detection
22. Natural gas and LPG are odourless and not detectable by individuals. In the event of a gas leak or a flame outage the ability to be able to detect the gas is vital because it may accumulate to levels that become flammable or explosive.
Gas Distribution
23. New Gas Act provisions require that regulations be made to require gas distributors to develop a safety management system (SMS) for their operations. SMSs are a formalisation of many of the procedures that are already undertaken by gas distributors to provide for the safety of people and property in New Zealand. The SMS provisions set out the responsibilities for gas distributors and establish an audit regime to ensure that those requirements are being met.
24. SMS are intended to provide a mechanism for:
- Monitoring
- Identification of problem areas
- Continual improvement
- Clarification of responsibilities
- Placing the onus on industry for safety.
Gas Appliances and Fittings
25. Ensuring the safety of gas fittings and appliances is a crucial component in the protection of people and property from the hazard posed by gas. This is because in the majority of situations, appliances and fittings are closely related to where people live, for example, gas stoves and water heaters, and a failure at this point is more likely to affect people and property. By placing requirements on the design, construction and overall performance of appliances and fittings it is intended to reduce the risks to the public.
Certification of Gasfitting
26. The qualifications required by gasfitters and the scope of work that they can carry out are crucial in terms of gas safety because the work needs to be performed correctly. Gasfitting not performed correctly can pose a range of hazards to people and property both while the work is being carried out and after its commissioning. Gasfitter licensing and competency is regulated under the Plumbers, Gasfitters and Drainlayers Act 2006. To provide consumers with an assurance that gasfitting work has been competently undertaken, gas certificates are required.
Offences and penalties
27. Offence and infringement provisions provide mechanisms to encourage parties acting within the gas industry to meet their responsibilities and take all practicable steps to ensure the safety of people and property around gas. The offence and infringement provisions allow action to be taken against parties that have been negligent in their actions (or inactions). Where offences are identified penalties may be imposed or proceedings may be taken that may result in fines or even imprisonment.
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